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Encouraging or forcing workers not to save in a workplace pension will become unlawful under proposed changes to the Pensions Bill, Minister for Pensions Reform Mike O’Brien said today.

The DWP intends to amend the current Pensions Bill  to prohibit employers from offering “inducements” - such as higher salaries or one-off bonuses - which encourage workers to opt out.

The amendment will also cover circumstances where employers simply try to force their workers to opt out. This will leave individuals free to decide if they want to be a member of a workplace pension scheme. The ban would come into effect with the introduction of auto-enrolment from 2012.

Minister for Pensions Reform Mike O’Brien said:

“It is very important that people are allowed to meet their retirement expectations by building up the savings they need. Decisions on whether or not to save in a workplace pension need to be taken free of any unfair pressure. That’s why we want to prevent employers from trying to pressurise staff or tempt them with ‘live for today’ inducements into opting out of pension saving.

“Whilst it may seem attractive in the short term to accept an inducement to opt out, when people reach retirement with a lower pension, they’re likely to regret taking the easy option.”

The Pensions Regulator will be responsible for enforcement of the prohibition on inducements - as well as its new key role of ensuring that employers fulfil their duties under the Bill, including the requirements to automatically enrol staff into a good workplace pension scheme, and provide the employer minimum contribution of three per cent.

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This entry was posted on Tuesday, June 24th, 2008 at 7:15 pm and is filed under ContractStore News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.